Skip to main content
Department of State

Business Assistance Programs

The Hon. Tahesha Way, Secretary

Large Business Assistance Program

Bond Financing

Creditworthy manufacturing companies, 501(c)(3) not-for-profit organizations, and exempt facilities in New Jersey may be eligible for long-term financing under the Bond Financing Program.

Dollar Amount:

  • $500,000 to $10 million in tax-exempt bonds for for-profit companies, up to 20 years for real estate and 10 years for equipment $500,000 with no dollar limit in tax-exempt bonds for qualified not-for-profit organizations

Uses:

  • Capital improvements and expansions
  • Land and building acquisitions, new construction and renovations, and equipment purchases
  • Projects owned and operated for local, county and state government bodies
  • Working capital and debt refinancing

Benefits:

  • Longer terms
  • Lower cost
  • Fixed or variable interest rates

Eligibility:

Through a federally authorized program, the EDA issues conduit tax-exempt private activity bonds, the proceeds of which are used to provide financing. Borrowers must meet the eligibility requirements outlined in the Internal Revenue Code (IRC) in order to qualify for tax-exempt bond financing, including:

Manufacturing/processing facilities:

  • Governmentally owned public airports, docks, wharves
  • Facilities that furnish water, electric, and gas; sewer facilities; and solid waste disposal, including certain recycling facilities
  • Certain facilities for governmental bodies, which qualify as tax-exempt governmental obligations
  • Certain not-for-profit 501I(3) entities, including service organizations, educational institutions and health care facilities
  • Certain assisted living facilities, which qualify as residential rental projects.
  • Taxable bonds are also available for a wide variety of businesses, such as manufacturing, commercial, warehouse, and distribution, etc. Taxable bonds offer similar flexibility in structuring rates and terms but are not subject to the restrictions placed on tax-exempt financing under the IRC.

Bonds are sold via direct purchase or public offering. A financial intermediary, typically a bank, will directly purchase bonds from the EDA once it has performed a credit review on the applicant’s project. The bank sets the interest rate, terms and other financial details. In a public offering, bonds are purchased by an underwriter and sold to private investors in the public marketplace and may be structured with a bank’s commitment to provide a letter of credit (LOC) or a municipal bond insurance policy. Market conditions will determine the interest rate, while the bond’s terms and other financial details are set by the LOC provider.

Fees apply and are non-refundable.

Division of Taxation Tax Clearance Certificate required. Certificates may be requested through the State of New Jersey’s Premier Business Services (PBS) portal online.

  • Under the Tax & Revenue Center, select Tax Services, then select Business Incentive Tax Clearance.
  • If the applicant’s account is in compliance with its tax obligations and no liabilities exist, the Business Incentive Tax Clearance can be printed directly through PBS.

Please note: It is the applicant/client’s responsibility to maintain a current and clear tax clearance certificate. If a current and clear certificate is not evidenced to EDA at time of closing, EDA will not proceed with closing.

https://www.njeda.com/financing_incentives/programs/bond_financing


Back
to top